David Gardner is a serial entrepreneur and angel investor based in Cary. He sold ProviderLink to Compuware for $12 million in 2006. Four years later, he sold Peopleclick to a New York private equity firm for $100 million. Among his portfolio of 25 local startups are FilterEasy, Stealz, Validic, ArchiveSocial, FotoSwipe and Fortnight Brewing. He had two exits in 2013: Magnus Health and ChannelAdvisor.
Gardner wrote The Startup Hats over Christmas 2013 and expects to publish it. In the meantime, he shares excerpts of each chapter with ExitEvent readers in 13 installments. Here’s part five. For the first four chapters, click here.
Once you have your first beta release specifications completed and your coders are hammering away, you will have the time to try on your marketing hat and start building some of the sales and marketing collateral you are going to need. B2C sales are often all about the advertising and instant gratification, but enterprise B2B marketing can be much more involved. Selling software to the enterprise is best achieved by positioning yourself as a valued consultant rather than an online retailer.
Mastering the pitch deck.
When I begin advising a new startup team, one of the very first things I do is help them develop and refine their master slide deck. Whether you are presenting in person, online or via a pre-recorded video on your website, the master pitch deck is the core communication tool for your value propositions. We spend a lot of time on this deck because your website, sales collateral, marketing campaigns, sales scripts, etc. will all flow from this master message. Making this message crisp and clear takes several iterations. It is a function of who you are selling to and how you position your message against competitors. Word connotations, images and speaking notes must be pitch perfect because mistakes made here will compound and flow to all of your other S&M material.
The pitch deck should be able to stand alone or play a supporting role for a presenter. I like to type out word-for-word what I intend to say on each slide in the notes section. This enables the deck to stand on its own even if you don’t get to accompany it. This is important because sometimes you don’t get to present. A gatekeeper might tell you to just send your information over. Maybe the person you did pitch to may ask you to send follow up information which then gets forwarded to others who may not have heard your presentation.
In a live presentation, attendees typically only remember about twenty percent of what you say. The deck with complete speaking notes serves to fill in the memory gaps. On occasions you may not get to present to the primary decision maker and you have to rely on the person you did pitch to, forward your material. In this case, the quality of a self-sufficient deck and speaking notes on each slide can literally make or lose the sale for you. Another big advantage of having comprehensive speaking notes is for training. It is much easier for new sales team members to learn the corporate pitch if they have complete speaking notes to study.
Your sales deck is similar to your investor deck, except your investor deck includes sections not needed in the sales deck. Investors want to know things like the size of your addressable market, competitors, use of funds and team biographies. Customers initially only want to know about the problem you are going to solve for them, how you solve it, and what that costs.
When it comes to pitch decks, less is usually more because the more you say, the less important each point will seem. So if you fill your deck with minor value propositions and superfluous stuff, it will only serve to dilute your core message.
- Discuss only one topic per slide.
- Use bullet points and tables to convey categories or lists.
- Don’t use a font smaller than 20 points and don’t include pictures or graphics unless they really do add to the specific point being made.
Your sales deck should start with your logo and tag line introduction slide. Here you state in a very concise sentence or two your mission statement i.e. the problem you solve and how you do it.
One of my startups had this speaking note on our introduction slide.
“We lower corporate recruiting costs and improve candidate selection by empowering organizations to build a database of all qualified applicants from all sources and then share that information globally”.
Another company I worked with had this opening statement.
“We make the healthcare data you need more accessible and less costly to collect by aggregating the data from major healthcare devices and phone apps into a single source.”
Notice how each of these examples start with the benefit first (the why) and then follows with what they do (the how). We will discuss this more in the chapter on sales. Keep your opening overview very concise or you will get flooded with questions and may lose control of your presentation.
The next couple of slides usually discuss the problem and why the audience should care about this problem. Each slide needs a simple subject or title that clearly states the point the slide is making in one complete sentence. The facts stated below a slide’s subject line should only support the point that one slide title makes. It might sound like I’m belaboring the obvious, but you simply would not believe the unintelligible sales decks I wade through each day. Maybe the entrepreneurs are just too involved with their solution and lose the ability to think like a person hearing about it for the first time, similar to how programmers are often unable to build an intuitive user interface to their code.
The problem and (why you should care) section of the presentation is followed by slides stating how your solution overcomes the problem and creates benefits for your prospect. Depending on your offering, you might include a slide discussing how your solution is better than alternative solutions or typical ways the problem is currently addressed.
Your deck should also include a pricing slide and a credibility slide with some reference customer’s logos and maybe a quote. Many enterprise solutions involve an implementation process. If it’s applicable, discuss how you will migrate data, train staff and insure that your solution is fully adopted. Big implementations are scary and full of career risk for those who approve them, so be sure to convey confidence in your implementation process.
The competitor comparison grid is worth additional noting here. Besides being a part of your pitch deck, it can also exist as stand-alone content. The trick here is simple. If you get to select the comparison categories, then your product or solution should always come out on top. I am a strong believer in the second rule of marketing; “if you are not first in a category then change the category”. Products are usually listed down the grid with comparison topics across the top. If your product has certain features that are missing from most of your competitors, then these make for great categories. You can use checks and X marks to indicate if a feature or benefit is present or not. Often full or empty circles are used with a half filled circle when a feature is partially achieved. Your product should have all checks or shaded circles while all of your competitors should obviously be missing some. The visual message here is that only your solutions have all of these categories covered.
Drafting the white paper—why the right collateral matters.
Besides the master pitch deck, there are other important pieces of collateral you will need. One important way to position yourself and your company as a valuable consultant and not a retailer, is to write a formal white paper discussing a best practice, key risk factors, etc. related to the industry or problem your solution is addressing. It has to at least appear to be objective and academic in tone, but there is a trick here as well. If your reader agrees with your logic, then you have won tremendous credibility and often a sale. If you position your paper well, then the only way the reader can implement that best practice or avoid those risk factors you discuss, is via the use of your solution.
The “manifesto white paper” can be key to positioning yourself as a thought leader and your company as a valued consultancy. Your paper can be leveraged to get free speaking opportunities at conferences, interviews with influential analysts, and all sorts of other valuable press. It can be re-themed for different verticals and broken up into sections to support numerous marketing campaign content offers.
Surprisingly, it doesn’t take very much research for you to know a lot more than most people know about their own industry, especially if you are selling to middle management. I believe it was Ross Perot, the colorful founder of EDS®, who estimated that if you read just one industry journal for 30 minutes each week, then you will know more about that industry than 90% of the people working in it.
I’m not sure why, but entrepreneurs are often reluctant to spend the time required to write a white paper even though they are typically only six to 12 pages long. Regardless of who writes it, it should always be attributed to you if you are the CEO or main company spokesperson. If you’ve done your research regarding your market and the problem you are solving, then this paper should not be too difficult to write. It’s a great exercise to help you organize your thoughts and find supporting industry materials. The process of writing this paper is important because it will move you a long way down the path of presenting yourself as an industry insider and subject matter expert. This is always the position of authority from which you want to be selling enterprise solutions.
The white paper: best practices.
One of my startups was a healthcare communications company for which I published a white paper discussing the numerous communication dependencies that exist in healthcare workflows. I discussed a best practice of keeping all patient information requests in a common audit-able and shared queue, rather than sending such requests to individuals. This approach reduced the potential number of failure points and enabled staff to work interchangeably. My “best practice” made a lot a sense to healthcare administrators, and since my software was designed to enable just such a process, my white paper sold plenty of accounts without ever even mentioning my product by name. It also garnered me speaking opportunities at numerous healthcare administration conferences.
Keep in mind that your paper can not sound like a sales pitch. It needs to stay focused on the problem, best practice, or risk factors stated in your title. If you do mention software that can address this problem or mitigate said risk factors, then you must do so generically wetting your readers’ appetite, but never mentioning your brand by name or your paper will lose credibility. At the end of your paper, it is appropriate to have a brief paragraph titled, “About the Author”. This is your chance to mention where you work, i.e. the name of your company or software. Some white papers also include a paragraph below this about your company. Make sure to include a contact for those interested in more information.
I want to make sure you get the tone of how these papers need to be positioned, so let’s do one more example. One of my portfolio companies built a product designed to automatically archive social media targeting government entities. I helped the CEO write a white paper on the risk factors associated with using social media. The paper pointed out that social media for government agencies falls under the Freedom of Information Act and as such, by law, it might have to be reproduced at any time and at anyone’s request. The paper discussed how difficult it is to keep track of social media two-way conversations that exist on multiple independent servers, and it convincingly argued that archiving was the only sure solution for full legal compliance. Again, without ever discussing or selling his product, this CEO clearly brought attention to the need for a solution like his. He concluded with a nice “about the author” section and the business started flowing in from state, local and federal agencies.
Why case studies are important marketing tools.
Case studies are another important part of your S&M arsenal. Industry executives are always looking to their peers and competitors to see who is doing what. A case study is a brief (usually only three to seven pages) story describing a problem a company faced and how they solved it. It must include some objective metrics showing a baseline before your solution was implemented and an improvement afterwards. It is fairly easy to get midlevel managers to agree to be the named author or co-author of such a study, especially if you write it for them and all they have to do is track the metrics. It makes them look good.
Keep in mind that you can only get a good case study if you have established a baseline metric before your solution is implemented. It’s too late to ask for a case study after your product is installed and functioning. Managers will often need to get corporate permission for this, but if you can find a willing manager, it is better to just go ahead and write the study, giving that manager the rights to edit and sign off on the case study as he or she sees fit once it’s done. If it makes them look smart and the organization efficient, then it usually gets approved for public distribution. Jointly presenting a case study with an industry executive is the only way you as a vendor can get to present at some of the more influential conferences.
Considering content marketing campaigns.
Campaigns that offer content are by far the most effective in B2B marketing. If you gate your content offer, you will be able to collect your prospects’ company, position and contact information. They will gladly trade this information for good content and if they are interested in your content, then they are probably potential buyers or at least influencers regarding the purchase of your solution. So, always be on the lookout for opportunities to acquire or create good content. Besides cutting up your white papers and case studies, you can also poll your current customers and publish the results as a “report”. Comparisons make good content as well. Try to offer your content in an intriguing yet easy to digest format like “the four most common reasons why…” or “the five biggest pitfalls when…” Your content should always demonstrate a need for, or point to the value of, your type of solution.
I often advise, “It’s easier to find hungry people than it is to try to make people hungry”. Marketing is the art of finding those prospects most receptive to your message (ready to buy) and bringing them into a discussion with sales. Marketing dollars spent effectively can be transformational for a startup, but unfortunately, marketing can also be the black hole of precious startup resources. When entrepreneurs don’t know what to do, they often simply throw more marketing dollars at a problem, exacerbating the cash flow issue caused by a lack of sales. It can be a vicious downward cycle.
Good marketing means knowing your customer.
How can you spend your precious marketing dollar effectively? Before considering any marketing media, you first must build a customer profile. You don’t have the money to go too broad, so you need to pick a single market segment on which to focus. When starting out, it is always better to look big in a small vertical than to go unnoticed in a massive one. Think deeply about who your decision makers are. What are their job titles? Who influences them? What do they read? What conferences do they attend? What thought leaders do they follow? How do they use social media? Can you use a targeted mailing list to directly launch content offers to them?
Marketing spend is a function of how fast you can afford to grow and how addressable the market segment is that you have chosen. Addressability is the term used to describe how difficult/costly it is to generate the kind of leads you want. Until you are confident in your customer profile, be conservative with your marketing spend. Much of marketing is simply intelligent trial and error; so it’s OK to make small mistakes, send up trial balloons, etc. so long as you can always track the results objectively. In the early days of marketing, I tell entrepreneurs that the first rule of effective marketing spend is “if you can’t track it, don’t do it.” Startups don’t have the resources to do image-building campaigns, so every marketing dollar spent needs to be tracked back to the number of qualified leads and ultimately sales it generated.
Yet again, I know this sounds obvious and trivial, but I guarantee that if you walk into 10 startups today, the majority of them do not have a system in place for comprehensively tracking marketing spend through to actual sales. The second rule of effective marketing spend is to see rule number one… if you can’t track it then don’t do it. Once you find a media that is producing leads cost effectively on a small scale, then you can increase your spend. But you have to continuously watch the numbers. For example, LinkedIn groups can initially provide very effective customer acquisition costs, but many of these groups are relatively small and dry up quickly.
Just because something works for a while does not guarantee that it will continue to produce for you. Wearing the marketing hat means always looking at the numbers to make sure that you are getting a good return on your marketing investments.
Find the best tools to measure your results.
There are many free and low-cost tools that can be used to track marketing campaigns and spending. There are email campaign tools that you can use to track open rates and do subject line A-B testing, etc. Then, there are customer relationship management (CRM) tools used by your sales team to track prospects in the pipeline, schedule follow up contacts and to forecast sales. The problem is that unless you purchase a fairly comprehensive S&M platform, none of these packages tend to work together seamlessly. So in effect, you may know that certain campaigns generated a lot of leads and you may know that you closed some sales, but you won’t be able to easily track which sales came from which marketing campaigns or media spend.
You have to connect the dots. Keep in mind that a campaign that generates a lot of leads from people who aren’t buying is the worst possible result because not only did you waste marketing dollars, now it’s killing the productivity of your sales team.
Remember to sign up for industry news feeds and set up ongoing web searches around key words related to the problem your solution addresses. I would always spend the first ten minutes or so of each morning doing this because it kept me up to speed on my market and it also provided me with lots of great marketing ideas. If you see an article discussing a law that might get passed or killed that would affect your industry, then think of how you could turn this information into a relevant and interesting webinar or content offer.
Stay in touch.
Most early stage marketing is focused on new lead generation, but lead nurturing can be equally important over time. Lead generation is the process used to acquire new prospect contacts, whereas lead nurturing is the process of staying in touch with the contacts you already have so they don’t forget about you when they are ready to purchase. B2C sales campaigns tend to provide instant gratification in that prospects tend to buy immediately, but B2B sales can have a long sales cycle. You don’t often find enterprise prospects ready to change out their accounting system on a click through campaign! The B2B value seed needs time to germinate. Often, big purchases have to be approved for the following year’s budget. Sometimes, prospects don’t even realize the value of your solution until they have been educated on the problem repeatedly. And of course, there are always those late adopters that know they need a solution like yours, but won’t buy a thing until many of their competitors have already done so.
B2B prospects need nurturing. Find ways to regularly remind them that you are a valuable partner, subject matter expert and solution provider. Offer them insights and relevant information that keep them coming to your site, reading your blog and opening your emails without wanting to unsubscribe.
If you are positioning yourself correctly and providing valuable information, then they will often forward your content or webinar invite to others, which will add to new lead generation. Keep pouring new leads in the top of your funnel while nurturing the leads already in the funnel and remember that good marketing doesn’t have to be expensive; it just has to be good.
Be a player at industry events.
If your solution is targeting businesses, then you will probably find yourself at a few conferences and tradeshows each year. These can be critically important to your business, but expensive in both dollars and time, so evaluate them carefully. I like to start out by researching and listing every possible show and event that would attract my customer profile. Yes, you need yet another spreadsheet! Add columns to show dates, costs and other evaluation criteria. Here are some of the criteria I used to evaluate and estimate the potential value of conferences:
- How many people will attend the conference or show?
- How closely do these attendees match my buyer profile?
- How many of my competitors are attending?
- How many of my competitors that attended last year are attending again this year?
- Can I get a speaking spot or on a panel discussion?
- Will I get the attendee list after the event?
- How much of our time will this cost and what else could we be doing with that time?
Remember that speaking at any professional event is always better than being just a vendor at a booth. You have to stay well ahead of these conferences to get speaking spots. Speaker abstracts need to be submitted several months before an agenda is published. As with all marketing, track your leads and sales to determine whether an event or conference should be repeated.
To get the most out of a conference, you have to start setting up meetings well in advance of the show. Rebroadcast the event invitation to your prospect list and invite anyone planning on attending to come by your booth or to attend your speaking session. Get on the phone. Many of the prospects in your database will be at a major event or conference. Try to schedule as many meetings as you can. I’ve been known to have multiple breakfasts and several lunches on the same day!
Set meetings up around breaks in the agenda and even host your own after-party. Face-time is precious and a gathering of qualified prospects can be an amazingly cost effective way to get tons of it if you do your homework well in advance of the event.
If you have a booth or table, make sure that it is always staffed. Make it clear to your staff that deserting your post is a serious offense. Train your booth team to always stand and make eye contact with each person passing by. Working a booth is not like other sales environments. In fact, the main goal should be lead generation not sales. The problem is that during a session break, hundreds of prospects may be walking by your booth or table. If you get sucked into a long conversation trying to sell one tire-kicker, a dozen other more qualified prospects will pass you by because you look busy or inaccessible. Some prospects plan to come back by later when you are less busy, but most get overwhelmed with everything going on and don’t get around to returning. It is best to try to avoid long sales discussions during high traffic times.
Train your booth sales team to not engage prospects in pairs. Unengaged salespersons should physically distance themselves from the other conversation and continue making eye contact with each person passing by. The pitch needs to be short and concise. Once you have the prospect’s information and a good short first impression completed, it’s time to start moving that prospect out of your booth. Promise to follow up and do! If the prospect is very valuable, then suggest a time later on when you can meet and discuss your prospect’s needs in a less chaotic setting.
Control the message.
A final responsibility of the one wearing the marketing hat is to be the sole keeper of the company’s marketing message. Marketing is the developer, improver and communicator of the “message”. Sales people may carry the message, but it is marketing that decides what that message is and only marketing can make changes to the message. Don’t let your staff create their own message. They can and should bring you ideas and suggestions, but marketing should always maintain tight control of anything being shown to the public that might affect the company’s image. The company’s message has to stay consistent or it will get diluted and confusing.
For example, you can’t have one sales person putting out stuff that says that your leadership development software is a replacement for traditional 360 reviews while another is saying that it is a supplement to the 360 review client’s already have. Your company message can be moving around some in the early days and often not communicated consistently by your team. The most important thing marketing does for the startup is to keep the team using the same message and to make sure they know when and why that message is modified.
Is our offering the better, faster or cheaper option? What do we compare ourselves to and what comparisons do we avoid? Marketing makes these calls. Someone needs to be the chief marketing officer (CMO) and if you don’t have someone who can sport this hat, then it is one you are going to have to wear.